Answering a question on Capcom's "alliances" with overseas developers, Tsujimoto echoes comments made a few weeks back by Resident Evil producer Jun Takeuchi (not to mention reminding us of his own personal scars), by essentially saying that it's hard, hard work joining forces with an international studio.

"Our experience with Bionic Commando has demonstrated the difficulty of outsourcing the development of new title to overseas companies", he said. "Nevertheless, we cannot develop a sufficient number of titles without using the resources of these companies. This is why we plan to continue using these alliances."

"We are considering ways to separate the roles of activities in Japan and overseas. We plan to develop new titles primarily in Japan. Overseas companies may be used mostly to develop titles for existing game series with well-established characters and universal themes. Overseas companies will also handle certain parts and/or lineups of such games."

So the West is a sequel farm for Capcom IP. And just like that, Capcom's decade-long program of reaching out to international developers in order to increase their global market share misses the point entirely.

Previously, Sony Computer Entertainment's distribution arm and that of the rest of the company were entirely separate operations. In 2010, though, they'll be rolled into the one unit.

You may ask why this hasn't always been the case, but remember, this is Sony. Units operating in blissful, counter-productive isolation is one of the main reasons the company is in such dire straits in the first place.

Sony to Combine International Distribution Operations [Business Week]

The company announced today that it was selling off its distribution company to SYNNEX for $43.25 million, putting all of its eggs into the publishing business basket going forward. Take-Two expects more than a quarter billion drop in estimated revenues for the year, a $120 million reduction in the first quarter alone.

That's a big drop. So, why would Take-Two do such a thing?

Publisher CEO Ben Feder says the sale "is consistent with our stated intention to focus our resources on our core business strategy - delivering globally the most innovative and creative interactive entertainment products."

Take-Two purchased Jack of All Games in 1998. The sale of the distribution arm to Synnex will mean a "small" loss for the publisher, with yearly revenue dropping from an expected $1.0-1.2 billion to $710-910 million.

In an SEC filing, Icahn declared his ownership of more than nine million shares, worth $70.6 million, and included his opinion that Take-Two's shares are "undervalued," which means he wants to talk to the company's leadership about turning that around, and 11 percent is clout enough to have that conversation.

Michael Pachter, the Wedbush analyst frequently quoted by the gaming press, told Gamasutra his firm thinks Icahn "intends to force the company to consider a sale." Pachter also pointed out that Icahn and Take-Two CEO Strauss Zelnick are on the Blockbuster board of directors.

From the filing, it appears Icahn's stake in Take-Two appeared to jump significantly in the past two weeks, when the publisher first announced it would fall short of its own guidance on fiscal earnings.
Activist Investor Icahn Boosts Take-Two Stake [Gamasutra]

According to a report on iSuppli - who have been doing this kind of thing for a while now - the total cost of manufacturing a PS3 Slim as of December 2009 is $336.27. And they sell for $299. Meaning Sony are still slugged with a $37 loss for every console sold.

Sounds bad - and when you multiply that $37 by millions, it certainly seems that way - but it's a damn sight less money than they were losing this time last year.

With the cost of materials continually on the decline, provided Sony can stick at a $299 price point for a while to come, you'd expect the PS3 to start generating a profit sometime next year.

Sony Gets One Step Closer to Breakeven Point with Latest PlayStation 3 Design [iSuppli]

Speaking with the Nightly Business Report, EA CEO John Riccitiello revealed that in this calendar year alone, "we've hosted over a billion online games, a billion online games. That's a staggering number."

Damn straight that's a staggering number.

[Nightly Business Report]

In an internal interview for Capcom's investor relations site, Jun Takeuchi - of Lost Planet and Resident Evil 5 fame - has gone all stick-in-the-mud.

"The core elements of [Lost Planet 2] were developed in Japan, while the music and some of the language details were handled overseas", he said. "Cultural differences don't allow for the smooth collaboration between Japan and developers overseas."

Well, they won't with an attitude like that!

Jun Takeuchi [Capcom] [image]

"Even now, there have been people in Japan using the label youge- (Western games) with a terribly discriminatory meaning," Wada said in a recent interview on Japanese TV in which he discussed Square Enix and Modern Warfare 2, which it published in Japan. "I'd like them to try it once. If they play it once, they'd realize how incorrect that label is."

The term "youge-" has been used to separate Japanese games from foreign titles, which, until recently, were believed to have little or no appeal to Japanese gamers. "Game" (ゲーム）refers to video games. "Youge-" (洋ゲー）means something else — these games are different, they are the other.

Continuing, Wada noted that Western developers really started to come into their own in 2005, but that there was a lag in importing these titles into Japan. "Japanese game makers have been overwhelming strong," Wada said. "Thus, perhaps it was not necessary to look outside." Times are changing, and so is Square Enix, it seems.

Wada Interview [YouTube]

The rest of Take-Two's slate, including BioShock 2, Red Dead Redemption and Mafia II appear to be sticking to their regularly scheduled dates. But Max Payne 3 is now penciled in for a fiscal Q4 2010 release, giving the PC, PlayStation 3 and Xbox 360 game an August to October release window.

The rest of Take-Two's bad news is financial. The company expects fourth quarter and fiscal year 2009 to be below guidance due to "the performance of its Major League Baseball titles in the fourth quarter" and "lower than expected initial performance of several of its key holiday releases."

Take-Two's 2010 is also expected to be loss-heavy, thanks to Major League Baseball losses and the "movement of one triple-A title out of the fiscal year."

Strauss Zelnick, chairman, says the company's quarterly financial woes "were partially offset by the performance of our catalog business and a number of our holiday titles, as shown by the successful launch of Borderlands and the leading ratings and market share of NBA 2K10."

With the publisher's full fiscal year guidance expecting a loss, even with the release of BioShock, Red Dead Revolver and Max Payne sequels, it sure doesn't sound like Rockstar will have a new Grand Theft Auto on store shelves—at least not before November 1, 2010—to help put Take-Two in the black.

Speaking at the Reuters Global Media Summit earlier today in New York, EA boss John Riccitiello said that despite plans to reduce the number of games he company releases from 50 to 40 next year, that's not where the knifework will end.

"Thirty wouldn't shock me at some point in the future", he said, meaning EA would publish 30 games in a single year.

Let's hope, even if it is a fool's hope, that means fewer iPhone and DS games, and not fewer Mirror's Edge 2s.

EA sees fewer titles; digital rising [Reuters]

The report says that two Japanese companies - Mitsumi and Hosiden - are facing massive losses in revenue this year due to the "declining fortunes" of the Wii and a "drop-off in orders from Nintendo to assemble game systems".

Both companies are now staring at a drop in net profits of more than 50%.

It's funny. It took Nintendo years to ramp up Wii production. They sure cut it back quick enough.

As Nintendo's Wii Stumbles, Parts Suppliers' Earnings Tumble [Nikkei, subscription required]

"In ten years' time a lot of what we call ‘console games' won't exist", Square Enix boss Yoichi "Imperial Hot" Wada told MCV in an interview.

"In the past the platform was hardware, but it has switched to the network. A time will come when the hardware isn't even needed anymore."

"With that, any kind of terminal becomes a potential platform on which games can be played – that's exponential growth in the potential of gaming. The potential size of the market is enormous."

So, while you may think FFXIII is the bees knees, Square are probably more interested about the performance of FFXIV.

Square Enix: Consoles set for extinction [MCV]

That's Beautiful Game Studios, the developers of the Championship Manager series. A Square Enix statement reads "Our current business model does not allow us to compete in a fast-changing industry with any degree of flexibility or commercial confidence".

"To achieve this, we will be restructuring Beautiful Game Studios, which will regrettably bring with it unavoidable job losses."

Ironically, 2009 was the first year since the great Football Manager/Champ Manager split that Square Enix's series (well, it used to be Eidos' series) actually stood up to the might of Sega's superior game.

Square say that both the developer and the series will live on, but how strongly BGS will be able to compete next year after job cuts and a thinly-veiled public vote of no-confidence from Square Enix is anyone's guess.

Cuts hit Champ Man studio [Develop]

Some may know Denise as that lady who replaced Nintendo fanboy icon Perrin Kaplan in the job. Others may know her as that lady who played splish-splash with Totilo, as both tried really hard to pretend Times Square was somewhere a little more tropical.

Either way, she's gone. Kaigler cites personal reasons for the departure (she lives in New England, Nintendo live on the other coast), with today her final day in the job.

In a statement issued to Kotaku, Nintendo of America's executive vice president of Sales & Marketing, Cammie Dunaway, says "Denise Kaigler has been a valuable part of the Nintendo of America team for the last two years. She’s made a personal decision to spend more time with her family in New England. We wish her all the best in this next chapter of her life, and we look forward to continuing to deliver great Nintendo experiences to people of all ages as we head into this holiday season".

Best of luck, Denise.

[image: JesseAngelo.com]

This is interesting because, as MacWorld points out, smaller developers had welcomed Android as an alternative to the sometimes inscrutable policies and decisions of the iTunes App store. Not Gameloft (though hardly a "smaller developer,") which says it sells "400 times more games on iPhone than Android," according to the finance director Alexandre de Rochefort, speaking at an investor's conference.

Moreover, "we have significantly cut our investment in Android platform, just like ... many others," Rochefort said, as reported by Reuters. "It is not as neatly done as on the iPhone. Google has not been very good to entice customers to actually buy products. On Android nobody is making significant revenue."

Reuters says that iPhone applications generated 13 percent of Gameloft's revenue in the last quarter.

Gameloft Says It, Others Reining in Android Plans [Reuters via MacWorld]

Take this one, for example. It's been put together by The Business Insider, and charts the decline in video game sales since 2007. As it says, it's based on a year-to-year percentage change, so a dip means the industry was down on where it was at the same point the year before.

CHART OF THE DAY: Video Game Industry Not So Recession Proof After All [TBI, via 1UP]

Flush with the success of the launch, Kotick this week offloaded almost two million Activision stock options he'd held since 2000. When they were worth $1.03 each. In this post-Modern Warfare 2 world, however, they're worth around $11.50.

Want me to do the math for you? Subtract the $2 million strike price from the equation and Kotick earned himself just over $20 million. In less than a week.

Think he's an asshole? He can't hear you. His mansions are insulated with money.

Activision CEO reaps $20.2 million in three-day stock sale [GameSpot]

Established at the end of October in Tokyo, the name of the company is "Cyber Ai Entertainment" with "ai" being Japanese for "love" and a pun on the word "eye". The Japanese source article does not have the official English spelling; however, the official spelling is on the LinkedIn page of Sony exec and Cyber Ai board member Takashi Usuki.

The new venture aims to commercialize the development of next-generation internet services.

Kutaragi has a 90 percent stake in the enterprise, while Usuki has the remaining 10 percent. The start-up has 20 million yen (US$223,000) in capital.

企業ニュース−企業の事業戦略、合併や提携から決算や人事まで速報 [NIKKEI NET（日経ネット）]

Sources tell Kotaku that the team working on Command & Conquer 4: Tiberian Twilight was warned of its fate today, with almost the entire team expected to be let go after the real-time strategy game ships some time in 2010.

Also said to be affected heavily are Spore and former-Sims studio EA Maxis, social network gaming acquisition Rupture Studios, and Mercenaries and The Saboteur creators Pandemic Studios LA. Those development studios are said to be hit with substantial layoffs, according to a source, with remaining employees relocated to EA headquarters in Los Angeles and Redwood Shores.

EA is rumored to have already laid off staff at Tiburon, Mythic Entertainment and Black Box, reports which the company has yet to confirm.

We've reached out to Electronic Arts to verify these latest details, but have not yet heard back.

A joint report issued by Enterbrain, the NPD Group and GfK Chart-Track has revealed that video game sales across the world's three largest markets (the US, Japan & UK) are down 6% in 2009's third quarter compared to the same time last year.

The breakdown? Sales are down 9% in the US, and a whopping 19% in the United Kingdom. Japan, however, bucks the trend, with game sales up 15% year-on-year. Thanks, Dragon Quest IX!

International game sales down 6% over Q3 [Gamespot]